Naver revenue jumps on popularity of Line

Naver, the nation’s largest portal service provider, saw its second quarter revenue leap to nearly 1 trillion won ($887.86 million), thanks largely to ad revenue and favorable overseas performance of its mobile chat app Line, the company said Thursday.

The company posted earnings of 987.281 billion won, a 26.3 percent year-on-year increase, while operating profit grew 44 percent to 272.664 billion won. The company’s net profit surged 71.8 percent to 213.224 billion won.

Advertising earnings accounted for 73 percent of revenue, posting 722.9 billion won, a 29.4 percent year-on-year increase. Ad sales on mobile app platforms were big contributors to the company’s revenue. Line, its popular mobile messenger overseas, began charging for ads on its timeline and news service in March, which lifted overseas ad earnings 99 percent.

An analyst from Meritz Securities had predicted the company might surpass 1 trillion won in quarterly earnings. However, that did not happen. “My forecast missed as Naver’s earnings from stickers and game sales slowed down in the second quarter compared to the previous quarter,” said Kim Dong-hee.

“But if Naver releases new games and keep rallying with its advertising earnings, quarterly revenue of more than 1 trillion won may still be possible during the latter half of the year.”

For now, Naver will focus on developing global players like Line.

“Stable sales growth from overseas advertising revenue in the second quarter and expansion of our mobile service users lifted performance for the second quarter,” said Naver CEO Kim Sang-hun. “To expand our overseas markets we will continue our challenges to foster new apps that could become the second- and third-generation model of Line app.”

Line Corp. reported 33.9 billion yen ($30 million) in revenue, a 20.6 percent growth. Its operating profit was 8 billion yen, reversing a loss a year before.

Naver’s shares on Korea’s main bourse fell 0.28 percent to 710,000 won, after soaring to 717,000 won near opening.

KIM JEE-HEE [kim.jeehee@joongang.co.kr]